Ben Bernanke spoke on the Hill today. You already know I’m not a fan of anything he has done. This is the man that oversaw the lenders. He enabled lenders to hand out money to people that couldn’t afford the first payment. This is a man that saw nothing bad coming in the housing, lending and financial debacle. And this a man whose only answer to problems that were caused by too much leverage and debt…is just adding more leverage and debt. On Capitol Hill today, it reminded me of “One Flew Over the Cuckoo’s Nest in which they’re sitting around the table playing poker.


Chuck Schumer, a Senator from New York, another miserable political failure, was almost begging Bernanke for more stimulus. Questions from some of the other people, both Republican and Democrat made absolutely no sense whatsoever.

But the one thing I was thinking about with not only Bernanke, but Obama and Geithner? They’re all taking credit for saving the day and for saving GM and saving the country from depression. And they give no credit to the people of this country working their rear ends off. And I’m thinking to myself, everything that has occurred over the past 3 ½ years was at a cost of $8 to $9 trillion. You take the $5 -$6 trillion of deficit spending that Obama has done. And then add the few trillion that Bernanke has printed to order to buy bonds so that interest rates are lower, so loans are lower…so we can juice the economy back up. But everything’s at a cost. There’s a problem. That’s all payback. The next 6 years of taxpayer dollars have already been spent. There is no way we recover from that. Count to 25. Ooops…$1 million was just added to the deficit.

The trillions of dollars of deficits that have occurred in the past 3 ½ years really started under George W. Bush. Before George Bush, deficits were under control. We were hit by 9-11 and George Bush did a great job of getting the economy back on track because he did the opposite of Barack Obama. He did a little stimulus. But mostly, he lowered taxes amongst a few other things. But then he went on a spending binge and people like John Boehner who are now beside themselves about the horrible spending of Barrack Obama, didn’t say a word about the spending under George Bush. And, of course, Barack Obama campaigned and said that “under my watch I will not treat your tax dollars like Monopoly money and I will go line by line through the budget.”

He lied. Everything he represented himself as, was a lie.

So…at what cost? There’s $5 to $6 trillion that Obama spent that the government never received… that will have to be paid back.

And speaking of Bernanke, Bernanke talked about the things he has done that has helped the economy. He has been the worst possible person for the economy. Do any of you believe that it’s because of him that the economy came back from ’08? No, it’s because it’s the 200 million of us that go to work every day. It had nothing to do with him.

It’s us. And now we get to listen to this stuff and now, at what cost?

In just the past 3.5 years, $5 to $6 trillion of our taxpayer dollars that have not even been earned yet is gone and will never do anything for anybody. I was just marveling at the abysmal failures in Washington DC, on TV in plain sight. Everyone of them – abysmal moronic failures that have brought us to this point of $15 to $16 trillion in debt.

And some of them are running victory laps.

And then I watched Bernanke say, it really doesn’t cost anything. He said that by buying Treasury Securities, it puts upward pressureon the prices of those securities and downward pressure on the yields – without affecting overall the size of the Federal Reserve’s balance sheet?

That’s a lie. The balance sheet of the Fed has exploded. He did it by printing money. And it’s sickening to watch. And it’s just doubly sickening to watch this president campaigning for another four years based on nothing he did over the past 3 ½ years. What is he going to say?

“Vote for me because I increased the deficit by $5 1/2 to $6 trillion.”

The Economy

Lastly, there is a group of people in my industry that are going around saying that our economy is in a depression. There’s a good amount of them that are out there saying that we’re in a recession.

Now let me be clear on my thoughts.

We’re not in a depression. We’re not even close. If the economy was in a depression, the Dow would be at 6000.

I don’t know what these people are trying to sell you. But we’re as far away from a depression as a depression can be, especially if they’re trying to compare today to the 1930s.

And we’re not even in a recession. A recession is defined by two quarters of down GDP in a row. We haven’t had one.

What we’re in is an anemic muddle through economy. It’s not good news. We need a lot better. Unfortunately, some are just trying to sell books. Have you ever seen a book written with the title ” MARKET IN TRADING RANGE!”? No…it’s always DOW 36,000 or THE NEXT GREAT DEPRESSION. Don’t buy into any of it.


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Best of Investor’s Edge
Saturdays 1-2 am EST

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.



No wonder after the two years of their unfettered power, we are screwed.

(CNSNews.com) – House Minority Whip Steny Hoyer (D-Md.) said Tuesday that food stamps and unemployment insurance are the two “most stimulative” t things you can do for the economy.

During a pen and pad briefing with reporters on Capitol Hill, Hoyer was asked if any Democrats are “reconsidering the wisdom” of letting the Bush tax cuts expire at year’s end for the top income earners given the still struggling U.S. economy.


SOURCE: http://cnsnews.com



Sen. Chuck Schumer, D-N.Y., exhorted Federal Reserve Chairman Ben Bernanke to stimulate the economy before November through some form of quantitative easing or other monetary policy, which Bernanke said could create jobs. 


SOURCE: http://washingtonexaminer.com



In what may be the best report ever on stock buybacks, accounting and tax analyst David Zion had this sobering comment: After reviewing the $2.7 trillion in buybacks by the S&P 500 from 2004 through 2011, “it looks like most of the buybacks by the S&P 500 over the past eight years have not yet added much value for remaining shareholders.”

Which is unfortunate, because as Zion writes, “it seems like many investors and analysts assume that buybacks automatically add value, regardless of the price paid.”


SOURCE: http://www.cnbc.com



…they keep being elected to run these states into the ground. In many cases, they lied about the pensions, the gains on the pensions, how much the pensions were and who was getting the pensions.

 WASHINGTON — The fiscal crisis for states will persist long after the economy rebounds as states confront financial problems that include rising health care costs, underfunded pensions, ignored infrastructure needs, eroding revenues and expected federal budget cuts, according to a report issued here Tuesday by a task force of respected budget experts.

 The severity of the long-term problems facing states is often masked by lax state budget laws and opaque accounting practices, according to the report, an independent analysis of six states released by a group calling itself the State Budget Crisis Task Force. The report said that the financial collapse of 2008, which caused the most serious fiscal crisis for states since the Great Depression, exposed a number of deep-set financial challenges that will grow worse if no action is taken by national policy makers.


SOURCE: http://www.nytimes.com

kaltbaum premarket

Sorry about last night…had rolling blackouts.
As soon as market closed down almost 50 yesterday, dow futures went up 50. Go figure. Einstein cant figure that crap out.
Not much from yesterday…but there has been some movement in down and out areas. The good news for overall market is that the energy and financial areas have turned the corner off their lows. Doesn’t mean they are going to rip to the upside…but does mean they will not be an anchor on the market. I will let you know if that changes again. I would also advise you to watch the sox. It is in an area where it has held several times in past year. I suspect and guess that it will be defended again…but if not, tells you something about how weak tech is.
GS gapping up a wee bit as well as CMA and KO. JBHT gapping down. There are a couple thousand more reports in next couple of weeks so pay attention.
I have no new plays today. Volume is a joke so nothing moving on volume. ULTA sitting on 50 day…CTRX fell a smidge below and finished on it. Snore! Wish I had more exciting things to say but it is the nature of the market right now. Patience.





We had a good day on Friday. Today, there was a little pullback. I think the main stance continues to be: Choppy, Choppy, Choppy, Choppy.

Bullish Monday, bearish Tuesday. I think the market’s going to be all over the map. Just remember that we’re in the midst of earnings season. Just put your seat belts on. There will be stocks gapping to the upside and stocks gapping to the downside and our job is to stay in gear with them. Why? Because typically, stocks that react well off of earnings reports vs. stocks that don’t will do better in the coming quarter. I’m not making that up. That’s how it works.

On Friday, there was very good reaction to a couple Financials, JP Morgan and Wells Fargo. I have to tell you that today, JP Morgan got hit. Wells Fargo was up a smidge. So nothing is written in stone. Take your time. Recognize that this is not a bull market. But also recognize that this is not what I’d call a big bear market, except in some areas.

I continue avoid anything Commodities, though they’re bouncing hear a little bit. We’re getting a little bit of money flowing into the oils here. But overall, I don’t think it’s the place to be.

The strongest group has been housing. It probably needs to pull in a little bit.

We’re getting a decent bid Agriculture because of the prices shooting up. If you look at the chart of AGU, CF, and MON, that’ll give a little bit of indication on what’s happening out there with those areas. Whether or not it continues —  I don’t know. Just remember, you’re dealing with a commodity and that can change suddenly. But I can tell you right now, those suckers are on a run.

Facebook Cup and Handle?

Last week I received probably 50 to 100 emails on Facebook asking, “Gary is that a Cup and Handle?” I answered all of them the same way. Not to my eye. But if Facebook can break about 32 or 33, it’ll be bullish near-term. But also mentioned to everyone of those emails, “Dudes, just look at valuations. You know what I think there. I know valuations can get out of whack, but I’m sorry, we’re not in a bubble like 1999. We should not have a $70 billion market cap with $4 billion in revenue and a slowing business. And, of course, we’ll see if their slowing in the next few quarters. Anyway, Facebook was down 2 and change. So if some of you were thinking it’s a good pattern, it’s rolling over here. I would just stay away from and for earnings to come out to get an understanding.


6-7 pm EST

Best of Investor’s Edge
Saturdays 1-2 am EST

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

kaltbaum early notes

Crappy open but market trying to come back as I write this.

The SOX continues to be under pressure but going to really watch closely as it is in the area where it was defended way back last November and December as well as early June of this year. If the SOX puts up a stand, will be a big help to the market. Already trying to reverse the SOX early. If the worst area stops going down…

I have been asked 100x if FB is a cup and handle. Answer…no. Wait for earnings. And you know what I think of valuations.
Take HD off watch here as it looks more toppy than wanting to break out. If that changes, will let you know.

CTRX and ULTA pulling back…ULTA recovering. A break below 50 day is sellable…and as I said, keep positions small.

C reported…was up nicely…and then into the red and now rebounding. Notice it having trouble at the 50 day.
I generally expect the market to continue to be a pain in the rear…and will go slow if that changes.

kaltbaum premarket

Early movers:

V and MA up nicely as their lawsuit pays out less than expected…and supposedly ends litigation against them by the retailers. Both up about 2-2.5%. C up on numbers about 3%. That’s JPM,WFC and now C reacting well to numbers.

Futures are down but not by much. Retail sales number was poor this morning. Until I say otherwise. ..trading environment right now, not investing. I gave you a fuller report last night for your review on areas typically not played at this service…but to make you aware that other areas working.
When I say to probe, it means partial positions. Would not send it in right now. HD needs the breakout…only probe on the breakout. CTRX and ULTA are small probes off the 50 day…with stops below. Stops are only about 2-3% below…in other words, not a lot of risk.
After the close earnings: JBHT, WYNN. Tomorrow morning: KO,CMA,GS,HOG,JNJ,KSU,STT,SCHW

kaltbaum email

The expectation is that the market has some more upside near term based on last week’s late action. Also seeing good set-ups in financials with a WFC breaking out…and not much bad happens when financials have a bid. Just keep in mind, there are a zillion reports coming out in the next two weeks and that the overall market is just in a range. If they start to move the leaders, I will issue alerts on them but right now, just a few holds of the 50 day and trading range action.
My growth leaders list:
Going through it, it is easy to see that the market has not enabled big gains recently. Most are just sitting (which is a good thing when markets are hit) while others have pulled into the 50 day (which is also fine as long as they hold) and a few that have broke below and are bye-bye for now. AMZN,CRUS,EBAY are 3 names that are off for now. EXPE would have come off if not for a good bounce back into the 50 on Friday.
AAPL- Setting up well into earnings…but 5th stage base.
AMZN– Breaks 50 day…wide and loose…off this list for now.
ALXN- Pullback mode after breaking out…trading sloppy…but stilll strong.
BIIB- Sits tight while others pull in…blah numbers.
CRUS– Breaks 50 day…SEMIS very weak group. Comes off this list.
CERN- Holds the 50 day.
DLTR- At 50 day…not thrilled with bearish wedge just above 50 day. A break below and bye-bye. Late stage.
EQIX- held 50 day to the penny on Thursday…acting fine as it rides it up.
EXPE- Breaks 50 day…almost off this list.
EBAY– Breaks 50 day…off list for now.
MNST- Sitting on 50 day and holds over past couple of days.
PETM- Very strong…didn’t budge.
PRGO- wild action after getting extended. Needs to tighten up.
ROST- Held 50 day on numbers. Late stage group. Acting fine.
SHW- Holds 50 day to the penny Thursday and back in base. Already big move.
TRIP- Holds 50 day to the penny on Friday and bounces strong. Potential big leader.
TJX- Moving into new highs here…but have to watch group. Continues to ascend nicely.
ULTA- Reverses back above 50 day on Thursday and is holding in new base.
V- Held 50 day to the penny on Thursday and back in base after failing breakout. MA is wide and loose.
WFM- still strong…nothing to do. Pulls in quietly.
Other notes:
I cannot help but mention the continued strength in the reits,drugs,food,beverages,household products, utilities, telco utilities. The new high list on the nyse is just about all reits and utilities. This service typically does not play these areas but had to make note of them. Here is a list for your review from the new high list:
Not on the new high list but with good charts are ABT,BMY,CHD,ECL,HSY,HNZ,KO,LO,MO,MKC,PEP,MO.
The issue with all these names is that growth is too slow…meaning they are capped on how far they can go…but I wanted to give you list just in case you like low beta, mega cap stuff with some having decent dividends.
Homebuilders continue to act great…new highs in LEN,MDC,MTH,PHM,SPF,RYL,TOL. Extended from recent move. I do think they may start pulling back here.
For the first time in months, a few financial names have showed up…just on a technical basis…not a fundamental basis.
WFC in a cup and handle breakout of early pivot…34.60 is next high.
STI needs to break above $25…but report this week. Great chart.
COF needs to leap above $55.40 but also reports this week.
DFS very strong relative strength and good pattern.
USB looks perfect but also reports this week.
TCBI low volume name…look how strong that it. Never budged.
BBT shaping up but also reports this week.
Nice handles along 50 day in XLF and IYF.
Had to mention TGT…should have played after watching WMT. Perfect breakout on Tuesday…look what happened Friday. Good to see that type of action.
IYR looks perfect as an ETF for the REITS. I mentioned some REITS earlier.
As far as plays, I am still in the trading camp and not investing. I have this sneaking suspicion that there could just be some more flop and chop.
HD is buyable moving above 53.28.
I think you can probe CTRX and ULTA here off the 50 day…but you must stop if the 50 day is broken to the downside.
I love the setups in STI,UNP,USB,COF but all report this week.